time in which you will have to
make these payments. This,
too, is an after-tax payment.
•
Payroll Deductions If you are
a County employee, you can
authorize OCERS to request
your Payroll Department to set
up a pre-tax payroll deduction
plan.
•
If you use this option, you
cannot change your payroll
deduction amount until you have
completed the buyback. Under
EGTERRA (Economic Growth
and Tax Relief Reconciliation
Act of 2001) laws, you may be
able to roll over money from
certain qualified plans (qualified
IRAs, 403(b) and 457 plans)
to pay off the balance of your
purchase of service credit.
Q:
When will the service credit show on
my account?
A:
After your Service Purchase Contract
has been paid in full.
Q:
What will happen to my funds if
I terminate employment before
completion of my Service Purchase
Contract?
A:
You have an option to complete the
Service Purchase Contract or receive a
refund of “buyback” contributions and
posted interest.
This brochure is intended to provide you with
general information. This brochure does not
constitute legal advice, and OCERS cannot
provide legal advice to members. If there are
any discrepancies between the information in
this brochure and the law, the law will prevail.
Should you have legal questions, you are advised to consult an attorney.
Orange County Employees Retirement Ssytem
2223 E. Wellington Avenue, Suite 100
Santa Ana, CA 92701
Tel: (714) 558-6200
Web site: www.ocers.org
October 2014
Service
Purchase
Contracts
(“buybacks”)
SERVICE PURCHASE CONTRACT
Q:
What is a Service Purchase Contract
(also known as a “buyback”)?
A:
“Service Purchase Contract” and
“buyback” are interchangeable terms. A
Service Purchase Contract (“buyback”)
allows a member to purchase or restore
service credit that is currently not on
deposit or credited in their OCERS
account. This may entitle a member to
an increased retirement benefit.
Q:
What is important about retirement
service credit?
A:
A retirement service credit is a measure
of time. It is one of the four factors
used to determine the amount of your
retirement benefits. Members receive
retirement service credit for the hours
worked during the period of time for
which they are compensated. This
service is included in determining when
a member meets the minimum criteria
entitling them to retirement benefits.
Q:
What types of retirement service
credit can be purchased?
A:
A member may be able to purchase and
receive service credit for eligible service
credit that was previously withdrawn or
previous County/participating employer
service for which they had not been
credited. Examples include:
•
The member terminated their
employment position which entitled
them to be an OCERS member
and withdrew their retirement
contributions;
•
An approved medical leave of absence
not to exceed 12 consecutive months
in any one absence that was without
pay due to illness or injury occurring
on or after January 1, 1978. The
member must have returned to regular
paid status in an eligible OCERScovered position;
•
Covered public service time. This is
defined as service with the State of
California, a county or city located
in California, or any district located
wholly or partially within Orange
County in which the member was
not entitled to a retirement benefit.
Note: Public service time does not
count toward meeting the minimum
qualifications for service retirement,
deferred retirement, disability
retirement or survivor benefits;
Q:
If I want to purchase previously
withdrawn service, how much do I
have to pay back?
A:
You would have to pay back the
previously withdrawn contributions and
interest that had been on deposit plus
additional interest which would have
accrued on those contributions had they
been left on deposit.
Q:
How do I arrange to purchase this
time back?
A:
You should call the Retirement Office’s
Member Services Department and
request to speak with the Benefits
Technician who handles Service
Purchase Contracts. The Technician
will send you the appropriate form
and assist you in what you need to
do. Once OCERS’ staff has received
the completed form, including any
necessary additional information,
staff will determine the amount to be
purchased. You will then receive a
written notification through the U.S.
mail of the cost to purchase service.
Q:
What are my purchase service credit
payment options?
A:
You will have three choices in which to
make payments:
•
Lump-Sum Payment You may
submit a personal check payable
to OCERS. This is an after-tax
payment.
•
Installment Payments You
can make payments directly to
OCERS by submitting personal
checks. Depending on the type
of purchase of service credit,
there is a specified amount of